Australian Incentive Plan Pty Ltd v Babcock and Brown International Pty Ltd

Australian Incentive Plan Pty Ltd sought a declaration and orders concerning the construction of a trust instrument established to provide employee incentives. The dispute involved Babcock and Brown International Pty Ltd, and the case was heard in the Supreme Court of Victoria. The central issue was the proper construction of the trust instrument, specifically whether a resulting trust for the settlor arose, and whether the trust instrument could be amended to terminate upon the liquidation of the holding company of the group employer. A further issue was whether the purpose of the trust had failed, necessitating the appointment of residual beneficiaries.

The Court examined whether the liquidator of the holding company had the capacity to appoint residual beneficiaries and whether the Court should approve the amendment of the trust deed to provide for termination upon liquidation. It also considered the exercise of the power of nomination of residual beneficiaries by the Court and the nomination of "charities" in accordance with the purposes of the trust. The Court found that the trust had indeed failed and that the liquidator had the capacity to appoint residual beneficiaries. The Court approved the amendment of the trust deed to provide for termination upon liquidation and exercised its power to nominate residual beneficiaries, specifically charities, in accordance with the purposes of the trust.

The final orders included the declaration that the trust had failed, the approval of the amendment to the trust deed, and the nomination of residual beneficiaries as charities. These orders were based on the principles established in the cited authorities, including In re Holmden’s Settlement Trusts; Inland Revenue Commissioners v Holmden, In re Druce’s Settlement Trusts, Butterell v Docker Smith Pty Ltd, In re Baden’s Deed Trusts, and Mettoy Pension Trustees v Evans.